AnalystWatch: IT as a service

June 2008

Leading vendors including IBM and Microsoft have this year unveiled numerous cloud computing initiatives, planting the notion of 'IT as a service' to describe IT resources such as software that are accessed as services, enabling enterprise IT functions to focus on strategic alignment with core business goals.

Cloud computing, a term which refers to computing resources that are accessed over the Internet, is currently the flavor of the season. Major players such as Google, Hewlett-Packard, IBM, and Microsoft have announced new initiatives this year, with many more expected to join in soon. While the industry may still be grappling with defining the details of cloud computing, arguably, the one unifying theme among all variants is the mode of delivery, or 'service'.

Cloud computing, along with on-demand applications and managed security, is increasingly being seen as part of an emerging IT as a service paradigm. The mood at a recent HP conference, and the buzz at the Web 2.0 Expo in San Francisco, reinforced the message that significant investments of capital, time, and intellectual resources are being directed toward creating the next generation of information and communication technology infrastructure, whereby almost everything that an enterprise IT function requires is offered as a service.

However, questions remain as to whether IT as a Service is really ready for enterprise adoption.

On April 14, Google and Salesforce.com announced a joint initiative that effectively enables enterprises to access a combination of productivity tools and enterprise applications delivered over the internet.

Software-as-a-Service, SaaS, which was arguably a success in the SME segment, is now expected to usher in a new wave of growth in the saturated enterprise applications market. Although there are numerous challenges, the advent of developer platforms designed for the cloud, such as Force.com and Oracle SaaS, will enable this transition.

As the SaaS model matures, fewer enterprises will need to deploy middleware in order to string together disparate pieces of business applications, legacy or otherwise. The onus of providing vital application integration capabilities is expected to shift to service providers, which will in turn rely on economies of scale as they look instead to provide these capabilities as a service.

Not surprisingly, infrastructure vendors are following suit in a big way. Amazon was a pioneer in 2006 with the release of S3, which offers storage as a service. Furthermore, major infrastructure vendors, including EMC, HP, and IBM, are now planning to offer an adaptive computing infrastructure as a service.

Thanks to the maturation of virtualisation technologies, vendors are garnering capabilities to provide enterprises with virtual infrastructure stacks, accompanied by best-in-class service-level agreements, all as a service. The adoption of virtual infrastructure, computing, and storage on-demand, will accelerate in tandem with the SaaS model, especially as device dependencies begin to disappear in the increasingly flattening world of enterprise IT.

Although the current hype around cloud computing might be overblown, the trend indicates the beginning of an era where all elements of the IT function are requested and provided for as a service. While the concept of providing elements of IT as a service is not entirely new, current conditions, including ubiquitous broadband access and a strong cloud computing ecosystem, have never been more favorable to warrant the success of the phenomenon.

As a result, enterprise IT functions, most of which currently focus on asset development, ownership, and management, will move toward being better aligned with the strategic goals of the organisation. Enterprises will be able to focus their efforts on their core competencies, without sacrificing the power of IT as a business enabler.

The era of IT as a Service is on the cusp of realization, promising a wave of change in the way that technology is perceived, built and accessed.